THE firm behind a massive development of 550 homes on the former Meridian TV site in the heart of Southampton has become the latest victim of the recession.

Oakdene Homes, which grew on the back of soaring south coast property prices, has been forced into administration after failing to reach an agreement with lenders about its debts.

The collapse casts major doubt over its £100m plans for two 18-storey towers and a crescent of apartments and family homes with gardens on the prestige Northam site.

Already well advanced, the scheme was widely expected to go ahead and the council was anticipating a planning application in March.

Oakdene’s shares, which had lost 91.6 per cent of their value over the past year, have been suspended. The move came ahead of last ditch negotiations with banks about its debts, which subsequently failed.

It is the first UK housebuilder to go into administration as a result of the credit crunch, but is just the latest city development to hit the financial buffers.

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Already plans for the Arts Quarter in the city centre have been hit by the collapse of developer City Lofts, while Wilson Bowden pulled the plug on building at Admiral’s Quay in Ocean Village and put the site up for sale. Work on flats at Royal Crescent by developer Inner Circle has also been halted by the economic slowdown, as have MDL Marina’s plans for a four-star hotel in Ocean Village.

Oakdene bought the site for £8.5m from Meridian in July 2007 but when it failed to submit a planning application in January, the TV company moved to start a £2.5m high court action against the firm, claiming the money was payable on the scheme getting the green light.

An earlier plan to build one 27-storey tower, one of the tallest in the south, on the site was shelved in favour of the two tower alternative, which also promised to open up the riverside to the public.

Councillor Royston Smith, Cabinet member for economic development, said: “The land has been bought and I don’t think it can quickly be sold. I don’t know what the administrator might say about the development.

“It is a blow and we need to see what it means but on the face of it, it’s a disappointment. That was one of the schemes we felt quite optimistic about. They said they wanted to crack on and do it and they meant it, so I am disappointed for them. They did everything that was asked of them.

“I had a preview of it and it was a really good scheme that had a lot going for it.”